Top insurance brokers, No. 2: Aon P.L.C.

2017 brokerage revenue: $9.97 billion

Percent increase (decrease): (14.1%)

One year on from the sale of a significant portion of its business, Aon P.L.C. is resetting and rebranding its units and making changes to its upper management as it seeks to refocus its slimmed-down operations.

The restructuring, which Aon expects will include job cuts of up to 4,800 and deliver $450 million in cumulative savings by 2019, will see the end of the Aon Benfield and Aon Risk Solutions names as all the brokerage’s units operate under the Aon flag.

Aon Hewitt, the former name of its benefits consulting business, was retired last year after the sale of its benefits outsourcing business to Blackstone Group L.P. for $4.8 billion. The drop in revenue resulting from the sale outweighed organic growth and growth via acquisitions in 2017, but Aon continued to add revenue through a string of deals.

Aon reported brokerage revenue of $9.97 billion in 2017, down 14.1% from 2016, but it retained its position as the world’s secondlargest brokerage in Business Insurance’s 2018 ranking.

Organic revenue increased 4%, and Aon spent about $1.2 billion completing 24 acquisitions last year. Most of the acquisitions — many in Europe, Australia and New Zealand — were “the tuck-in variety,” said Michael J. O’Connor, co-president of Aon and former CEO of Aon Risk Solutions.

However, Aon did make several buys that brought in other expertise, such as Cleveland-based Townsend Group, a real estate investment consulting firm, and some smaller deals that focused on data and analytics, he said.

“It’s really about how can we find unique capabilities that fit in well” with Aon’s strategy, he said.

Mr. O’Connor was named to his new position in May. He and fellow co-President Eric Andersen, previously CEO of Aon Benfield, report directly to Aon CEO Greg Case. Mr. Case, who previously also held the title of president, in April extended his employment contract with Aon until 2023.

Other management changes included naming John Zern, CEO of Aon’s health solutions business, to the additional role of CEO for North America for commercial risk solutions. Cary Grace, CEO of retirement solutions, added the role of heading global M&A integration.

The changes in management and the realignment of the business units are designed to bring more focus to Aon’s operations, Mr. O’Connor said. “We want to unite our firm internally, we want to work together in a more collaborative, seamless manner, and that will manifest itself in our ability to deliver for clients.

We’ve moved to a single (profit and loss reporting structure) and dropped the brands in an effort to try and create the best environment where we can work together as teammates.”

Aon now has five “solution lines” reported: retirement solutions, commercial risk solutions, health solutions, data and analytics services, retirement and investment consulting. And dispensing with the insurance and reinsurance brokerage brand names should make it easier for staff to work together, Mr. O’Connor said.

“There are certain situations where bringing together insurance and reinsurance capabilities to think about what is the best solution for a client is truly the right answer for the client,” he said.

Restructuring efforts to date appear to be successful, said J. Paul Newsome, managing director for equity research at Sandler O’Neill & Partners in Chicago.

“So far, so good. There’s an enormous amount of change happening there. They are still adapting to the split that accompanied the sale of their administration business and trying to continue to boost profit margins through the cost-cutting,” he said.

Aon has been through several successful restructurings before, particularly after it has made a series of acquisitions, and should again be in a stronger position when it completes the current effort, said Gretchen Roetzer, director at Fitch Ratings Inc. in Chicago.

“Aon has a proven track record in cleaning up their shop; they have a solid management team that is staying on for another four or five years,” she said.

Looking forward, there are several areas where Aon expects to see rapid growth in the next few years, Mr. O’Connor said.

For example, health and benefits consulting will likely experience increased demand as life expectancy and health care costs increase, he said. “For us, that means clients need our help and individuals need our help.”

And certain specialty areas on the property/casualty side are seeing increased demand, such as cyber insurance and insurance to cover risks for “gig economy” businesses. In addition, transactional insurance, such as representations and warranties coverage, is growing, Mr. O’Connor said.